Japanese firms  form RP vehicle for clean dev’t projects

Japanese firms Itochu Corp. and Dowa Eco-System Co. Ltd. have formed a joint venture company in the Philippines to serve as the corporate vehicle for its proposed clean development mechanism (CDM) project.

The new company, IDES Corp., has already been issued a corporate license by the Securities and Exchange Commission. Initially capitalized at P130 million, IDES is owned 51 percent by Itochu while the remaining 49 percent is held by Dowa.

The project is expected to generate CER (certified emission reduction) by reducing greenhouse gases through the capture and combustion of methane from swine manure treatment in the Philippines.

This is the first CDM project for both companies and is expected to generate about 150,000 tons of CER annually from 2009 by the installation of methane recovery systems at swine farms near Manila. IDES will conclude contractual agreements with pig farms in the vicinity of Manila before establishing methane collection facilities.

The CER generated by the project will be sold to Japanese buyers and to Itochu and Dowa for their own use.

Itochu and Dowa hope to expand the range of contracted farms in the Philippines and implement this project  in other Asian countries to contribute to the middle and long-term efforts by the Japanese government to combat global warming.

Methane is a relatively potent greenhouse gas with a high global warming potential of  72 (averaged over 20 years) or 25 (averaged over 100 years). While it is not toxic, methane is highly flammable and may form explosive mixtures with air. Methane is violently reactive with oxidizers, halogens and some halogen-containing compounds.

With this CDM project, tent-like structures will be erected over the animal waste treatment ponds and the methane produced by fermentation will be collected and burned effectively. In this way, Itochu and Dowa will reduce the escape of methane into the atmosphere, thereby creating CERs that can be exchanged for the right to discharge greenhouse gases.

Founded in 1858, Itochu has evolved and grown over 150 years into a sogo shosha, engaging in domestic trading, import/export, and overseas trading of various products such as textiles, machinery, information and communications-related products, metals, products related to oil and other energy sources, general merchandise, chemicals, and provisions and food.

Itochu has also invested in insurance agencies, finance, construction, real estate trading, and warehousing as well as operations and businesses incidental or related to those fields.